Editorial

Editorial - Apple iPhone Naysayers Seek Irrational Refuge

Friday, March 7th, 2008 at 5:05 PM - by

Apple's iPhone SDK announcement yesterday is being met with a mixture of glee and trepidation. If it weren't for continued problems in the subprime mortgage crisis, AAPL would have shot up $20. The fact that it didn't and the fact that Apple has had enterprise problems in the past is leading to a false sense of confidence by the naysayers that Apple cannot succeed fabulously. It's an irrational wish.

The Fake Steve Jobs said it best:

"BackBerry is dead. Microsoft is dead. Windows Mobile is dead. Amazon is dead. Kindle is dead. Nokia is dead. Motorola was already dead but now they are even more dead. Google's Android is dead. Samsung is dead. LG is dead. Sony is dead. UTStarcom is dead. We've thrown $100 million into an iFund so people can build iApps to sell on iTunes and give us 30% of their iMoney. The coming onslaught of new applications will make iPhone the only smart phone that anyone in the entire world will ever want to use."

Dan Dilger at Roughly Drafted took a typical, thorough look at the iPhone business model and compared it to the rest of the players. Clearly, Apple is in a much better, smarter position than Microsoft and most of the other players.

There's a lot of inertia in the PC community that is accustomed to being able to count Apple out in the enterprise and in the home PC market. Basically, they're living in a comfortable past of Microsoft good fortune and Apple blunders during the Sculley and Spindler era. The one thing that's left now is to hang onto the idea that Apple isn't so good at enterprise sales because the Mac hasn't succeeded brilliantly in the enterprise. Jason Perlow made that argument today at ZDNet. He claimed that if Apple were more open about things, corporate clients wouldn't be turning instead to Linux servers in the data center.

Another final refuge is the idea that since the iPhone was targeted, for the sake of market success, at consumers who have sole discretion and purchase authority, that the iPhone is forever marked as a consumer toy that can't check the enterprise boxes. And even if it can, businesses will never allow such an adorable device into the hands of their slaves. They might actually watch a movie. I suspect, from what I've heard, that Apple may be able to deal with that by allowing businesses to profile the functions they want to enable. I wouldn't underestimate Apple here.

While iPhone naysayers will continue to find "killer" yet phony issues that disqualify Apple from the enterprise mobile phone market, there is one aspect of the iPhone business model that cannot be overlooked, and that's the explosion in development that's going to happen with a state of the art, Xcode, OS X, OpenGL, and Cocoa development environment. No other manufacturer has been able to invest in a remotely similar technology because they were strapped for money -- thanks to being ripped off by the carriers in subsidy deals that diluted their brand, profits, and imagination.

In a note to investors today, Gene Munster absolutely nailed it. He said: "The platform with the most active developer community will likely win the battle in the mobile computing arena." By Labor Day, there may well be 1,000 native apps for the iPhone.

As some people are fond of saying, you can take that to the bank. That's where Apple will win, and businesses that still want to hold the iPhone at arms length may do so for emotional or political reasons. They'll do it with fanfare, and the usual publications will write profile stories on them proving that the iPhone isn't for everyone. Meanwhile, Apple will just keep on making big money, gain market share, and cleverly leverage its competitors right into bankruptcy and obscurity.

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A guest said: (hide)

Fri Mar 07, 2008 7:06 pm

Amen to that. There is nothing more to say about it. Time will tell:)

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Wings said:

member since 30 Mar 2004 with 88 posts, unranked, send him a message or view his profile

Fri Mar 07, 2008 8:02 pm

Just a little off-topic (but it was mentioned in the article)....

If Apple does allow companies to turn off certain features of the iPhone, it seems to me to be a simple feat to turn them off whenever the iPhone is physically located at the business location and allow them everywhere else. After all, the iPhone DOES know where it's at, right?

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A guest said: (hide)

Fri Mar 07, 2008 10:15 pm

[quote="Wings"If Apple does allow companies to turn off certain features of the iPhone, it seems to me to be a simple feat to turn them off whenever the iPhone is physically located at the business location[/quote]I'm also wondering about proprietary apps. I work for government and there is no way any of my iPhone apps can be distributed through the App Store or iTunes. Enterprise will need a way to load their own corporate apps and background data that is *not* done through the Apple walled garden. My worry is that Apple will sell such an environment, but only for a really steep price. Sure I can write and load an app from the SDK. But what about loading it on 40,000 iPhones?

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rezonate said:

member since 04 Feb 2005 with 704 posts, unranked, send him a message or view his profile

Fri Mar 07, 2008 10:17 pm

Wings wrote:
If Apple does allow companies to turn off certain features of the iPhone, it seems to me to be a simple feat to turn them off whenever the iPhone is physically located at the business location.
I work for government and there is no way any of my apps will be distributed through the Apple walled garden approach. Sure I can write and load an app through the SDK. But what about to 40,000 iPhones? They'd better build in some way to let corporations bypass the App Store and iTunes and allow their employees to load up custom, secure material.

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A guest said: (hide)

Sat Mar 08, 2008 1:08 am

already covered: enterprise model allows for application "push" to the phone - no user intervention required or needed

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rjackb said:

member since 08 Dec 2005 with 35 posts, unranked, send him a message or view his profile

Sat Mar 08, 2008 1:35 am

Any analyst or naysayer who has not watched the entire video of the presentation about the upcoming iPhone enhancements on Thursday, March 7, 2008 is not at all qualified to make any statement at all about the iPhone SDK or iPhone applications. Between the most complete enterprise support that I've ever seen in any mobile device as well as the almost unlimited capabilities of the iPhone SDK that are light-years ahead of any other mobile device SDK, the iPhone's potential is absolutely enormous.

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A guest said: (hide)

Sat Mar 08, 2008 3:33 am

The article does not mention one thing: The cost of the device.

While it offers a nice look-and-feel, and is more finger-friendly than a WM6-device, its cost is much higher than that of any other mobile device. In germany, the cheapest way to aquire and use an iPhone is to shell out 1,600 Euro over the timeframe of two years. With a decent WM6-device, the cost is in the range of 600-900 Euro, divided into appx. 100-400 Euro for the device, 240 for the phone tariff and another 240 for the data plan.

These prices are solid, and offer you a device with GPS, UMTS/HSDPA, a touchscreen and the ability to load a large number of standard applications.

In my opinion, the value of customized applications on the device is strongly overvalued. The corporate road warrior will still need a standard laptop to be productive, and the phone is the small gadget which he can bring with him anywhere, and still be connected via voice and mail, and stay organized.

By adding Exchange-pushmail together with support for security policies, Apple has taken the major obstacle in functionality. While this will not cover all messaging scenarios, it sure helps with the majority of companies and their communications/security needs.

However, a HTC Touch 2 offers about the same functionality. The substandard browser can be replaced by Opera Mobile or Opera Mini, and the result is a phone with good connectivity, mail, organizer functions with full integration into the corporate network, a good browser and a finger-friendly user-interface.

Over a timeframe of two years, its cost is about half that of the iPhone.

There are and will be iPhones in corporations, but Apple will have to change their business model to compete with the Touch. Btw: The first Touch-model has sold more than 800,000 times, even without the big marketing that the iPhone had.

Thus, for corporations to accept the iPhone as a part of their standard deployment scenario (not talking about senior executives - those will always have the phone they prefer), Apple will have to find a new business plan which allows the carriers to offer the device at much lower cost.

Have fun!

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A guest said: (hide)

Sat Mar 08, 2008 3:44 am

1000 Native Apps? Try a platform agnostic language like Java. The Apple community has been releasing these sweeping predictions for almost the last decade about the Mac taking over the corporate world, and now the iPhone just because it supports push email.

Realistically, for sure I see enthusiasts being able to integrate their iPhones with their corporate life (depending on how stuffy their sys-admins are), however Apple has never been about (nor will it ever) competing on price which believe me when you are faced with having to purchase handsets for over 1000 on-road sales staff is one of the core decisions. What does what it needs to do, at the lowest cost? Most of us responsible for this decision (unless we are die-hard Apple fans willing to put our own careers at risk for overspending just because we like them better) don't give a damn about how nice it is for our staff to swivel their fingers around the screen and all the other cool stuff that comes along with it. Sure - we'll buy them for ourselves to use personally - but it's going to take a lot more than the introduction of push email and exchange support for the iPhone to be a serious competitor to both the crackberry and the M$ platform phones.

Because of this and despite having a *very* passionate following it will continue failing to make inroads into the majority market that is (especially with the current market climate) price sensitive.

If Apple ever did start competing on price then that would be another story... Problem then would be the quality of the gadgets would also be likewise affected.

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A guest said: (hide)

Sat Mar 08, 2008 8:16 am

Oh ye naysayers, hasn't apple shown you it will compete on price. Can't buy an iPod equivalent any cheaper. Similarily configured mac's and PC's the price differential is gone.

There is no way Apple is going to let price stand in the way of dominating the market. Job's learned this lesson, and BTW it was Sculley that tarnished the brand and made it so high priced compared to the rest of the industry. He's going to make a good buck until some competition shows up, then just like Microsoft, he's going to drop the price, and with the exiting market share and better product, ( and I mean end to end solution, not just the phone) will crush the competition.

So, let's get real guys. Apple is about to dominate the largest electronic market out there. Buy some Apple stock now and enjoy the ride, or be sorry.

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A guest said: (hide)

Sat Mar 08, 2008 8:46 am

Guest wrote:
The article does not mention one thing: The cost of the device.

While it offers a nice look-and-feel, and is more finger-friendly than a WM6-device, its cost is much higher than that of any other mobile device. In germany, the cheapest way to aquire and use an iPhone is to shell out 1,600 Euro over the timeframe of two years. With a decent WM6-device, the cost is in the range of 600-900 Euro, divided into appx. 100-400 Euro for the device, 240 for the phone tariff and another 240 for the data plan.

These prices are solid, and offer you a device with GPS, UMTS/HSDPA, a touchscreen and the ability to load a large number of standard applications.

In my opinion, the value of customized applications on the device is strongly overvalued. The corporate road warrior will still need a standard laptop to be productive, and the phone is the small gadget which he can bring with him anywhere, and still be connected via voice and mail, and stay organized.

By adding Exchange-pushmail together with support for security policies, Apple has taken the major obstacle in functionality. While this will not cover all messaging scenarios, it sure helps with the majority of companies and their communications/security needs.

However, a HTC Touch 2 offers about the same functionality. The substandard browser can be replaced by Opera Mobile or Opera Mini, and the result is a phone with good connectivity, mail, organizer functions with full integration into the corporate network, a good browser and a finger-friendly user-interface.

Over a timeframe of two years, its cost is about half that of the iPhone.

There are and will be iPhones in corporations, but Apple will have to change their business model to compete with the Touch. Btw: The first Touch-model has sold more than 800,000 times, even without the big marketing that the iPhone had.

"Thus, for corporations to accept the iPhone as a part of their standard deployment scenario (not talking about senior executives - those will always have the phone they prefer), Apple will have to find a new business plan which allows the carriers to offer the device at much lower cost."

Have fun!

Did ya ever think that if Apple is dominating the consumer market, which you all seem willing to cede to Apple, that Enterprise's won't have to be buying the iPhone, they just have to support the platform their employees ALREADY OWN on their first day of work??

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A guest said: (hide)

Sat Mar 08, 2008 9:11 am

Guest wrote:

Did ya ever think that if Apple is dominating the consumer market, which you all seem willing to cede to Apple, that Enterprise's won't have to be buying the iPhone, they just have to support the platform their employees ALREADY OWN on their first day of work??

Well, your company is obviously not forced to certify ISO27001? ISO/BSI-regulations strongly discourage you from allowing the use of privately owned phones for the storage of classified business data, including e-mail.

Think honestly: Would you like your private phone to adapt a policy where you need to enter the pin after 15 minutes of inactivity, have the device fully erased after 8 misentries of the pin, locked the mailaccount down and to go to your it-support staff to install a new game, which they might decline?

When the question came up in my company, I posed these questions, and the matter was instantly settled.

While I stand to these limitations (smartphones do contain classified data), they are not my personal ideas, but you will find them when you have a look at the requirements for IT-security certification.

Have fun!

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deasys said:

member since 08 Apr 2003 with 269 posts, unranked, send him a message or view his profile

Sat Mar 08, 2008 3:46 pm

Quote:
While I stand to these limitations (smartphones do contain classified data), they are not my personal ideas, but you will find them when you have a look at the requirements for IT-security certification

...And those "requirements" can be readily met by any iPhone running version 2 software.

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Intruder said:

member since 07 Jul 2004 with 2993 posts, TMO Mac Specialist, send him a message or view his profile

Sat Mar 08, 2008 6:26 pm

I hope they don't contain classified data (which has a specific meaning). Proprietary or sensitive data, yes. Classified would be a violation of national security.

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A guest said: (hide)

Sun Mar 09, 2008 7:09 am

deasys wrote:
Quote:
While I stand to these limitations (smartphones do contain classified data), they are not my personal ideas, but you will find them when you have a look at the requirements for IT-security certification

...And those "requirements" can be readily met by any iPhone running version 2 software.

By selecting this quote, you focussed on the wrong part. It is clear that these requirements can mostly be met by the iPhone with software 2.0. However, if my employer wanted me to lock my phone to make it as secure, he'd better pay for the device. As long as it's mine, I decide which software to run on it, so I won't offer my personal phone for my employer's usage, and I am quite sure that a lot of people who bought this device to have fun with in their leisure time would object as well

The other point which you deleted from my text is that ISO 27001/BSI require the corporation to use corporation-owned devices in case that the information has a higher level of confidentiality than medium for the corporation. This is often the case for internal email. For example, if an employee in sales does internal correspondence concerning pricing information for a bidding, the leakage of this information can have a severe impact on the company. If the company decides (or is required by Basel-2 or SOX) to certify their IT-processes, they will have so few cases of allowed private smartphones that the hassle will not be worth it.

I am not a native english-speaker, so I might confuse the use of "classified information". Afaik, "confidential" is one type of classified information. Classified does not mean the highest level of security, but the fact that it has a higher clearance than unclassified. However, I might be wrong on this. In any case, I do not refer to government-classifications per se, but to any corporate information whose disclosure might cause harm to the company.

In any case, with the features in apple's new software I have no real headaches concerning the use as a corporate phone. For applications with a higher demand on security, there will be the requirement of additional software (like on WM-phones). I just want to point out that the cost of an iPhone is double the amount of a decent WM6-phone (including provider charges), and that Apple will need to lower the price to make a really big hit in the corporate market.

Have fun!

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A guest said: (hide)

Mon Mar 10, 2008 12:06 am

These naysayers are just like the ones that said that Apple would never make a dent in the mobile phone market.

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